Endeavour Silver Announces Strong Year End 2021 Financial and Operating Results with Earnings Per Share of $0.08
VANCOUVER, British Columbia, March 10, 2022 -- Endeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE: EXK; TSX: EDR) is pleased to announce its financial and operating results for the year ended December 31, 2021. All dollar amounts are in US dollars (US$).
“2021 marked another strong year for Endeavour Silver. Our two producing mines – Guanaceví and Bolañitos – generated significant operating cash flow that we are using to extend mine lives and fund future growth,” stated Dan Dickson, CEO of Endeavour Silver. “Investment in the next leg of our growth, the transformational Terronera project, began last fall and is advancing well. While project financing is moving more slowly than expected, the project continues to move forward and with the receipt of financing and board approval in the next couple of months, is still expected to complete commissioning in H1 2024.
2021 Highlights
- Production Surpasses 2021 Guidance: 4,870,787 ounces (oz) of silver and 42,262 oz of gold for 8.3 million oz silver equivalent (AgEq)1.
- Highest Recorded Revenue in 5 years: Net revenue of $165.3 million from the sale of 3,856,883 oz of silver and 39,113 oz of gold at average realized prices of $25.22 per oz silver and $1,790 per oz gold. Management withheld metal sales during the year and carried a significant metal inventory at year end totaling 1,028,340 oz silver and 1,044 oz gold of bullion inventory and 54,270 oz silver and 2,630 oz gold in concentrate inventory.
- Improved Net Earnings: $14.0 million, or $0.08 per share, up from net earnings of $1.2 million, or $0.01 per share in 2020. Net earnings in 2021 were impacted by the increased finished goods inventory held, which was carried at a cost of $15.6 million compared to the estimated fair market value of $31.7 million at December 31, 2021.
- Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)(2): $54.9 million, an increase of 87% from 2020.
- Increased Cash Flow: $32.2 million in operating cash flow before working capital changes(2), an increase of 12%. Mine operating cash flow before taxes(2) was $61.9 million, an increase of 10%.
- Costs Impacted by Industry-Wide Inflationary Pressures: Cash costs(2) of $9.31 per oz payable silver and all-in sustaining costs (2) of $20.34 per oz payable silver, net of gold credits were slightly above guidance due to increased labour, power and consumables costs.
- Strong Balance Sheet: Cash position of $103.3 million and working capital(2) $121.2 million as at December 31, 2021.
- Guanaceví Continued to Outperform: Silver and gold grades continued to deliver well above plan and throughput approached plant capacity.
- Bolañitos’ Performance Remained Steady: Silver grades and plant throughput exceeded plan with gold grades slightly below plan.
- Encouraging Brownfields Exploration Results from Guanaceví and Bolañitos: Drilling continued to intersect highgrade gold-silver mineralization in the Santa Cruz vein at Guanaceví and to intersect multiple mineralized structures near current workings at Bolañitos.
- Positive Greenfields Exploration Results from the Parral Project: Drilled over 18,000 metres targeting several areas along the La Colorada vein with encouraging results in areas outside the current mineral resource estimate.
- Continued to Advance the Terronera Project: Work continued on final detailed engineering, early earth works, critical contracts and procurement of long lead items. The financing and final permitting processes are progressing, however, delays caused by the Omicron variant have slightly extended the anticipated timeline. The Company intends to make a formal construction decision subject to completion of financing and receipt of additional amended permits in the coming months.
- Sold El Cubo Assets: The Company sold its El Cubo assets in Guanajuato, Mexico to Guanajuato Silver Company (formerly Vangold Mining Corp) for $15 million plus contingent payments of up to $3 million in a transaction that closed April 9, 2021.
- Suspended Operations at El Compas: Management suspended operations at El Compas in mid-August and is currently evaluating its alternatives for the asset.
- Acquired Bruner, an Advanced Stage Exploration Project: Ideally situated within Nevada’s Walker Lane northwest trending mineral belt, this acquisition closed on September 1, 2021.
Financial Overview (see appendix for consolidated financial statements)
Three Months Ended Year Ended December 31 December 31 2021 Highlights % % 2021 2020 2021 2020 Change Change Production
| 1,443,564 1,117,289 | 29% | Silver ounces produced | 4,870,787 3,513,767 | 39% | ||
| 9,446 | 12,586 | (25%) | Gold ounces produced | 42,262 | 37,139 | 14% |
| 1,432,578 1,108,848 | 29% | Payable silver ounces produced | 4,826,681 3,482,094 | 39% | ||
| 9,261 | 12,314 | (25%) | Payable gold ounces produced | 41,438 | 36,392 | 14% |
| 2,199,244 2,124,169 | 4% | Silver equivalent ounces produced(1) | 8,251,747 6,484,887 | 27% | ||
| 8.65 | 6.83 | 27% | Cash costs per silver ounce(2) | 9.31 | 5.55 | 68% |
| 11.99 | 14.58 | 14.70 | 14.01 | |||
| (18%) | Total production costs per ounce(2) | 5% | ||||
| 19.48 | 18.52 | 20.34 | 17.59 | |||
| 5% | All-in sustaining costs per ounce(2) | 16% | ||||
| 213,492 | 237,389 | (10%) | Processed tonnes | 887,424 | 757,160 | 17% |
| 112.91 | 105.07 | 115.36 | 101.17 | |||
| 7% | Direct operating costs per tonne(2) | 14% | ||||
| 136.62 | 129.66 | 133.97 | 114.57 | |||
| 5% | Direct costs per tonne(2) | 17% | ||||
| 13.41 | 14.83 | (10%) | Silver co-product cash costs(2) | 15.11 | 12.97 | 16% |
| 1,038 | 1,129 | 1,072 | 1,109 | |||
| (8%) | Gold co-product cash costs(2) | (3%) |
Financial
| 48.5 | 60.7 | (20%) | Revenue ($ millions) | 165.3 | 138.4 | 19% |
| 1,413,699 1,419,037 | (0%) | Silver ounces sold | 3,856,883 3,460,638 | 11% | ||
| 8,715 | 13,850 | (37%) | Gold ounces sold | 39,113 | 35,519 | 10% |
| 23.41 | 24.76 | (5%) | Realized silver price per ounce | 25.22 | 21.60 | 17% |
| 1,811 | 1,885 | (4%) | Realized gold price per ounce | 1,790 | 1,846 | (3%) |
| (0.5) | 19.9 | (102%) | Net earnings (loss) ($ millions) | 14.0 | 1.2 | 1104% |
| (0.5) | 20.3 | (102%) | Adjusted net earnings (loss)(2)($ millions) | (8.6) | 1.6 | (646%) |
| 12.2 | 20.8 | 41% | Mine operating earnings (loss) ($ millions) | 36.4 | 27.3 | 33% |
| 18.2 | 30.2 | (40%) | Mine operating cash flow before taxes ($ millions)(2) | 61.9 | 56.2 | 10% |
| 10.7 | 21.6 | (51%) Operating cash flow before working capital changes(2) | 32.2 | 28.8 | 12% | |
| 10.7 | 24.3 | (56%) | Earnings before ITDA(2)($ millions) | 54.9 | 29.4 | 87% |
| 121.2 | 70.4 | 72% | Working capital(2)($ millions) | 121.2 | 70.4 | 72% |
Shareholders
0.00 0.13 (100%) Earnings (loss) per share – basic 0.08 0.01 700% 0.00 0.13 (98%) Adjusted earnings (loss) per share – basic(2) (0.05) 0.01 (593%) Operating cash flow before working capital changes per 0.06 0.14 0.19 0.19 (54%) share(2) 1% 170,518,894157,536,658 8% Weighted average shares outstanding 167,289,732150,901,598 11%
(1) Silver equivalent (AgEq) is calculated using an 80:1 silver:gold ratio.
(2) These are non-IFRS financial measures and ratios. Further details on these non-IFRS financial measures and ratios are provided at the end of this press release and in the MD&A accompanying the Company’s financial statements on SEDAR at www.sedar.com.
For the year ended December 31, 2021, net revenue, net of $2.0 million of smelting and refining costs, increased by 19% to $165.3 million (2020: $138.4 million).
Gross sales of $167.3 million in 2021 represented a 19% increase over the $140.2 million in 2020. Silver oz sold increased by 11% with a 17% increase in the realized silver price, resulting in a 30% increase in silver sales. Gold oz sold increased by 10% with a 3% reduction in the realized gold price, resulting in a 7% increase in gold sales. During the period, the Company sold 3,856,883 oz silver and 39,113 oz gold for realized prices of $25.22 and $1,790 per oz, respectively, compared to sales of 3,460,638 oz silver and 35,519 oz gold for realized prices of $21.60 and $1,846 per oz, respectively, in 2020. In 2021, silver and gold London spot prices averaged $25.14 and $1,799, respectively.
The Company significantly increased its finished goods silver and gold inventory to 1,082,610 oz and 3,674 oz, respectively, at December 31, 2021 compared to 116,484 oz silver and 1,459 oz gold at December 31, 2020. The cost allocated to these finished goods was $15.6 million at December 31, 2021 compared to $3.6 million at December 31, 2020. At December 31, 2021, the finished goods inventory fair market value was $31.7 million, compared to $5.8 million at December 31, 2020. Earnings and other financial metrics, including mine operating cash flow(2), operating cash flow(2) and EBITDA(2) were impacted by the increased bullion inventory held at year end.
After cost of sales of $128.9 million (2020 - $111.1 million), an increase of 16%, mine operating earnings were $36.4 million (2020 - $27.3 million). The increase in cost of sales was due to increased production, labour, power and consumables costs and significantly higher royalty costs, offset by improved productivity at the Guanaceví and Bolañitos operations. Royalties increased 69% to $13.8 million due to increased mining of the high-grade Porvenir and Porvenir Cuatro extensions at the Guanaceví operation, which are subject to significantly higher royalty rates. During 2021 the Company’s operations experienced higher than budgeted costs due to global supply constraints, inflationary pressure, materials shortages, labour costs tracking higher than planned and increased purchased ore at the Guanaceví operation. In 2020, there was a temporary suspension of the Guanaceví, Bolañitos and El Compas operations due to COVID-19, which impacted sales and costs of sales during that period.
The Company had operating earnings of $22.3 million (2020: operating loss $0.8 million) after exploration and evaluation costs of $17.9 million (2020: $9.8 million), general and administrative costs of $10.1 million (2020: $12.7 million), an impairment reversal of $16.8 million (2020: $0.4 million impairment expense), care and maintenance cost of $1.3 million (2020: $5.2 million), severance cost of $0.7 million in severance (2020: $Nil) and a write-off of exploration properties of $0.7 million (2020: $Nil). The impairment reversal of $16.8 million is resulting from the valuation assessment performed for the El Cubo mine and related assets upon classification as held for sale whereas the 2020 impairment charge on non-current assets of $0.4 million related to the value in use estimates of the Guanaceví and El Compas operations. The $1.3 million in care and maintenance costs for 2021 are comprised of $0.7 million recognized for the El Cubo operation for costs to the sale of the mine and related assets in April 2021, and $0.6 million recognized for the El Compas operation, where operations were suspended in mid- August, 2021. During the comparative period of 2020 the Company recognized $3.0 million in care and maintenance costs for the suspended El Cubo operation and $2.2 million in care and maintenance costs related to the temporary suspension of the Guanaceví, Bolañitos and El Compas operations due to COVID-19.
Earnings before income taxes were $29.7 million (2020: loss before income taxes $1.0 million) after finance costs of $1.0 million (2020: $1.3 million), a foreign exchange loss of $1.1 million (2020: $1.5 million), a gain on disposal of the El Cubo mine and related assets of $5.8 million (2020: $Nil) and investment and interest income of $3.7 million (2020: $2.6 million).
The Company realized net earnings for the period of $14.0 million (2020: $1.2 million) after an income tax expense of $15.7 million (2020: income tax recovery of $2.2 million). Current income tax expense increased to $3.5 million (2020 - $3.0 million) due to increased profitability impacting the special mining duty, while deferred income tax expense of $12.2 million is primarily due to the estimated use of loss carryforwards to reduce taxable income at Guanaceví (2020 – deferred income tax recovery $5.2 million).
Direct operating costs(2) on a per tonne basis increased to $115.36, up 14% compared with 2020 due to higher operating costs at Guanaceví and Bolañitos. Guanaceví and Bolañitos have seen increased labour, power and consumables costs and at Guanaceví, increased third party ore purchased and operating development have increased compared to the prior year. There has also been a slight appreciation of the Mexican Peso to US Dollar foreign exchange rate compared to the prior period, which increased expenses denominated in Mexican Pesos.
Consolidated cash costs per oz, net of by-product credits, increased to $9.31 primarily due to the higher direct costs per tonne and lower realized gold prices compared to 2020. All-in sustaining costs increased 16% to $20.34 per oz in 2021 as a result of higher cash costs, increased mine site exploration expenses and increased capital expenditures at Guanaceví to accelerate mine development within the El Curso ore body. Actual cost metrics were slightly higher than 2021 cost guidance primarily due to the increased costs relating to labour, power, consumables, increased third party ore purchases, higher royalties and special mining duty offset by the higher ore grades mined at Guanaceví.
The complete financial statements and management’s discussion & analysis can be viewed on the Company’s website, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. All shareholders can receive a hard copy of the Company’s complete audited financial statements free of charge upon request. To receive this material in hard copy, please contact Investor Relations at 604-640-4804, toll free at 1-877-685-9775 or by email at info@edrsilver.
Conference Call
A conference call to discuss the Company’s 2021 financial results will be held today at 10:00 a.m. PT / 1:00 p.m. ET. To participate in the conference call, please dial the numbers below.
Date & Time: Thursday, March 10, 2022 at 10:00 a.m. PT / 1:00 p.m. ET
Telephone: Toll-free in Canada and the US +1-800-319-4610 Local or International +1-604-638-5340 Please allow up to 10 minutes to be connected to the conference call.
Replay: A replay of the conference call will be available by dialing (toll-free) +1-800-319-6413 in Canada and the US or +1-604-638-9010 outside of Canada and the US. The replay passcode is 8312#. The replay will also be available on the Company’s website at www.edrsilver.com.
About Endeavour Silver – Endeavour Silver Corp. is a mid-tier precious metals mining company that operates two highgrade underground silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision, pending financing and final permits and exploring its portfolio of exploration and development projects in Mexico, Chile and the United States to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders.
SOURCE Endeavour Silver Corp.
Contact Information
Trish Moran Interim Head of Investor Relations Tel: (416) 564-4290 Email: [email protected] Website: www.edrsilver.com
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Endnotes
1 Silver equivalent (AgEq)
AgEq is calculated using an 80:1 silver:gold ratio.
2 Non-IFRS and Other Financial Measures and ratios
Certain non-IFRS and other non-financial measures and ratios are included in this press release, including cash costs per silver ounce, total production costs per ounce, all-in costs per ounce, all-in sustaining cost (“AISC”) per ounce, direct operating costs per tonne, direct costs per tonne, silver co-product cash costs, gold co-product cash costs, realized silver price per ounce, realized gold price per ounce, adjusted net earnings (loss) adjusted net earnings (loss) per share, mine operating cash flow before taxes, working capital, operating cash flow before working capital adjustments, operating cash flow before working capital changes per share, earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA per share and sustaining and growth capital.
Please see the December 31, 2021 MD&A for explanations and discussion of these non-IFRS and other non-financial measures and ratios. The Company believes that these measures and ratios, in addition to conventional measures and ratios prepared in accordance with International Financial Reporting Standards (“IFRS”), provide management and investors an improved ability to evaluate the underlying performance of the Company. The non-IFRS and other non-financial measures and ratios are intended to provide additional information and should not be considered in isolation or as a substitute for measures or ratios of performance prepared in accordance with IFRS. These measures and ratios do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to other issuers. Certain additional disclosures for these non- IFRS measures have been incorporated by reference and can be found in the section “Non-IFRS Measures” in the December 31, 2021 MD&A available on SEDAR at www.sedar.com.
Reconciliation of Working Capital
| Expressed in thousands US dollars | As at December 31, 2021 As at December 31, 2020 | |
|---|---|---|
| Current assets | $161,762 | $104,970 |
| Current liabilities | 40,554 | 34,553 |
| Working capital | $121,208 | $70,417 |
Reconciliation of Adjusted Net Earnings (Loss) and Adjusted Net Earnings (Loss) Per Share
Expressed in thousands US dollars Three Months Ended Years Ended December 31 December 31
| (except for share numbers and per share amounts) | 2021 | 2020 | 2021 | 2020 |
| Net income (loss) for the period per financial statements | ($471) | $19,923 | $13,955 | $1,159 |
| Impairment (reversal) of non-current assets, net of tax | - | $424 | (16,791) | $424 |
| Gain on disposal of El Cubo mine and equipment, net of tax | - | - | (5,807) | - |
| Adjusted net earnings (loss) | ($471) | $20,347 | ($8,643) | $1,583 |
| Basic weighted average share outstanding | 170,518,894 | 157,536,658 | 167,289,732 | 150,901,598 |
| Adjusted net earnings (loss) per share | ($0.00) | $0.13 | ($0.05) | $0.01 |
Reconciliation of Mine Operating Cash Flow Before Taxes
Three Months Ended Expressed in thousands US dollars Years Ended December 31 December 31
| 2021 | 2020 | 2021 | 2020 | |
| Mine operating earnings (loss) per financial statements | $12,222 | $20,814 | $36,368 | $27,335 |
| Share-based compensation | 87 | 60 | 421 | 330 |
| Amortization and depletion | 5,014 | 8,919 | 23,977 | 28,136 |
| Write down of inventory to net realizable value | 896 | 405 | 1,168 | 405 |
| Mine operating cash flow before taxes | $18,219 | $30,198 | $61,934 | $56,206 |
Reconciliation of Operating Cash Flow Before Working Capital Changes and Operating Cash Flow Before Working Capital Changes Per Share
Three Months Ended Expressed in thousands US dollars Years Ended December 31 December 31
| (except for per share amounts) | 2021 | 2020 | 2021 | 2020 |
| Cash from (used in) operating activities per financial statements | $18,071 | $26,650 | $23,462 | $38,964 |
| Net changes in non-cash working capital per financial statements | 7,392 | 5,028 | (8,776) | 10,138 |
| Operating cash flow before working capital changes | $10,679 | $21,622 | $32,238 | $28,826 |
| Basic weighted average shares outstanding | 170,518,894 | 157,536,658 | 167,289,732 | 150,901,598 |
| Operating cash flow before working capital changes per share | $0.06 | $0.14 | $0.19 | $0.19 |
Reconciliation of EBITDA and Adjusted EBITDA
Three Months Ended Expressed in thousands US dollars Years Ended December 31 December 31
| 2021 | 2020 | 2021 | 2020 | |
| Net income (loss) for the period per financial statements | ($471) | $19,923 | $13,955 | $1,159 |
| Depreciation and depletion – cost of sales | 5,014 | 8,919 | 23,977 | 28,136 |
| Depreciation and depletion – exploration | 92 | 28 | 330 | 311 |
| Depreciation and depletion – general & administration | 63 | 49 | 165 | 202 |
| Depreciation and depletion – care & maintenance | 30 | (31) | 55 | 214 |
| Depreciation and depletion – inventory write down | - | 231 | 6 | 231 |
| Finance costs | 22 | 332 | 724 | 1,357 |
| Current income tax expense | 1,005 | 1,937 | 3,481 | 2,993 |
| Deferred income tax expense (recovery) | 4,992 | (7,112) | 12,252 | (5,206) |
| EBITDA | $10,747 | $24,276 | $54,945 | $29,397 |
| Share based compensation | 718 | 617 | 3,636 | 3,003 |
| Impairment (reversal) of non-current assets, net of tax | - | 424 | (16,791) | 424 |
| Gain on disposal of El Cubo mine and equipment, net of tax | - | - | (5,807) | - |
| Adjusted EBITDA | $11,465 | $25,317 | $35,983 | $32,824 |
| Basic weighted average shares outstanding | 170,518,894 | 157,536,658 | 167,289,732 | 150,901,598 |
| Adjusted EBITDA per share | $0.07 | $0.16 | $0.22 | $0.22 |
Reconciliation of Cash Cost Per Silver Ounce, Total Production Costs Per Ounce, Direct Operating Costs Per Tonne, Direct Costs Per Tonne
Expressed in thousands US dollars Three Months Ended December 31, Three Months Ended December 31, 2021 2020 El El Guanaceví Bolañitos Total Guanaceví Bolañitos Total Compas Compas
Direct production costs per financial $18,689 $7,329 ($5) $26,013 $15,635 $7,420 $3,060 $26,115 statements Smelting and refining costs included in net
- 362 (4) 358 - 380 111 491
revenue
| Opening finished goods | (12,910) | (2,306) | - | (15,216) | (3,318) | (335) | (585) | (4,238) |
| Finished goods NRV adjustment | - | - | - | - | - | - | 174 | 174 |
| Closing finished goods | 10,093 | 2,857 | - | 12,950 | 1,509 | 250 | 642 | 2,401 |
| Direct operating costs | 15,872 | 8,242 | (9) | 24,105 | 13,826 | 7,715 | 3,402 | 24,943 |
| Royalties | 4,199 | 79 | 4 | 4,282 | 4,210 | 69 | 155 | 4,434 |
| Special mining duty(1) | 932 | (152) | - | 780 | 1,050 | 354 | - | 1,404 |
| Direct costs | 21,003 | 8,169 | (5) | 29,167 | 19,086 | 8,138 | 3,557 | 30,781 |
| By-product gold sales | (7,293) | (8,380) | (112) (15,785) | (8,998) | (12,327) (4,784) (26,109) | |||
| Opening gold inventory fair market value | 2,127 | 3,560 | - | 5,687 | 3,712 | 723 | 1,229 | 5,664 |
| Closing gold inventory fair market value | (1,900) | (4,784) | - | (6,684) | (735) | (746) | (1,283) (2,764) | |
| Cash costs net of by-product | 13,937 | (1,435) | (117) | 12,385 | 13,065 | (4,212) | (1,281) | 7,572 |
| Amortization and depletion | 2,181 | 2,827 | 177 | 5,185 | 2,850 | 2,779 | 3,290 | 8,919 |
| Share-based compensation | 43 | 44 | - | 87 | 16 | 22 | 22 | 60 |
Opening finished goods depreciation and (1,920) (1,171) - (3,091) (855) (158) (776) (1,789) depletion NRV depreciation cost adjustment - - - 6 - - 231 231 Closing finished goods depreciation and 1,965 635 - 2,600 271 104 804 1,179 depletion Total production costs $16,206 $900 $60 $17,172 $15,347 ($1,465) $2,290 $16,172
Three Months Ended December 31, Three Months Ended December 31, 2021 2020 Guanaceví Bolañitos Total Guanaceví Bolañitos Total Compas Compas
| Throughput tonnes | 108,334 | 105,158 | - | 213,492 | 106,425 | 107,332 23,632 237,389 | |
| Payable silver ounces | 1,298,036 134,178 | 364 | 1,432,578 988,722 | 94,526 | 25,600 1,108,848 | ||
| Cash costs per silver ounce | $10.74 | ($10.69) | N/A | $8.65 | $13.21 | ($44.56) ($50.04) | $6.83 |
| Total production costs per ounce | $12.49 | $6.71 | N/A | $11.99 | $15.52 | ($15.50) $89.45 | $14.58 |
| Direct operating costs per tonne | $146.51 | $78.38 | N/A | $112.91 | $129.91 | $71.88 $143.96 $105.07 | |
| Direct costs per tonne | $193.87 | $77.68 | N/A | $136.62 | $179.34 | $75.82 $150.52 $129.66 | |
| Expressed in thousands US dollars | Year Ended December 31, 2021 | Year Ended December 31, 2020 |
El El Guanaceví Bolañitos Total Guanaceví Bolañitos Total Compas Compas Direct production costs per financial $51,761 $28,896 $8,946 $89,603 $40,693 $21,796 $11,612 $74,101 statements Smelting and refining costs included in net
- 1,715 244 1,959 - 1,393 433 1,826
revenue
| Opening finished goods | (1,509) | (250) | (642) | (2,401) | (1,509) | (219) | (169) | (1,897) |
| Finished goods NRV adjustment | - | - | 266 | 266 | - | - | 174 | 174 |
| Closing finished goods | 10,093 | 2,857 | - | 12,950 | 1,509 | 250 | 642 | 2,401 |
| Direct operating costs | 60,345 | 33,218 | 8,814 102,377 | 40,693 | 23,220 | 12,692 76,605 | ||
| Royalties | 13,165 | 265 | 350 | 13,780 | 7,407 | 197 | 550 | 8,154 |
| Special mining duty(1) | 2,674 | 53 | - | 2,727 | 1,635 | 354 | - | 1,989 |
| Direct costs | 76,184 | 33,536 | 9,164 118,884 | 49,735 | 23,771 | 13,242 86,748 | ||
| By-product gold sales | (22,639) | (38,645) (8,738) (70,022) (17,458) | (33,970) (14,126) (65,554) | |||||
| Opening gold inventory fair market value | 735 | 746 | 1,283 | 2,764 | 437 | 244 | 213 | 894 |
| Closing gold inventory fair market value | (1,900) | (4,784) | - | (6,684) | (735) | (746) | (1,283) (2,764) | |
| Cash costs net of by-product | 52,380 | (9,147) | 1,709 | 44,942 | 31,979 | (10,701) (1,954) 19,324 | ||
| Amortization and depletion | 7,944 | 13,491 | 2,713 | 24,148 | 8,785 | 8,947 | 10,404 28,136 | |
| Share-based compensation | 180 | 180 | 61 | 421 | 114 | 108 | 108 | 330 |
Opening finished goods depreciation and (271) (104) (804) (1,179) (252) (43) (121) (416) depletion NRV depreciation and depletion cost
- - 6 6 - - 231 231
adjustment Closing finished goods depreciation and 1,965 635 - 2,600 271 104 804 1,179 depletion Total production costs $62,198 $5,055 $3,685 $70,938 $40,897 ($1,585) $9,472 $48,784
Year Ended December 31, 2021 Year Ended December 31, 2020 El El Guanaceví Bolañitos Total Guanaceví Bolañitos Total Compas Compas
Throughput tonnes 414,355 418,514 54,555 887,424 346,679 331,174 79,307 757,160 Payable silver ounces 4,320,567 462,700 43,414 4,826,681 3,061,982 333,293 86,819 3,482,094
| Cash costs per silver ounce | $12.12 | ($19.77) $39.37 | $9.31 | $10.44 | ($32.11) ($22.51) $5.55 |
| Total production costs per ounce | $14.40 | $10.93 | $84.88 $14.70 | $13.36 | ($4.76) $109.10 $14.01 |
| Direct operating costs per tonne | $145.64 | $79.37 $161.56 $115.36 | $117.38 | $70.11 $160.04 $101.17 | |
| Direct costs per tonne | $183.86 | $80.13 $167.98 $133.97 | $143.46 | $71.78 $166.97 $114.57 |
Reconciliation of All-In Costs Per Ounce and AISC per ounce
Three Months Ended December 31, Three Months Ended December 31, Expressed in thousands US dollars 2021 2020 El El Guanaceví Bolañitos Total Guanaceví Bolañitos Total Compas Compas
| Cash costs net of by-product | $13,937 | ($1,435) ($117) $12,385 $13,065 | ($4,212) ($1,281) $7,572 | |||||
| Operations stock based compensation | 43 | 44 | - | 87 | 16 | 22 | 22 | 60 |
| Corporate general and administrative | 1,538 | 578 | 22 | 2,138 | 1,972 | 1,009 | 375 | 3,356 |
| Corporate stock based compensation | 439 | 141 | (11) | 569 | 274 | 149 | 50 | 473 |
| Reclamation - amortization/accretion | 62 | 50 | 2 | 114 | 10 | 8 | 2 | 20 |
| Mine site expensed exploration | 251 | 448 | - | 699 | 246 | 199 | 284 | 729 |
| Intangible payments | 72 | 26 | - | 98 | 30 | 30 | 31 | 91 |
| Equipment loan payments | 246 | 489 | - | 735 | 315 | 650 | - | 965 |
| Capital expenditures sustaining | 7,742 | 3,344 | - | 11,086 | 3,519 | 3,750 | - | 7,269 |
| All In Sustaining Costs | $24,330 | $3,685 | ($104) $27,911 $19,447 | $1,605 | ($517) $20,535 | |||
| Growth exploration and evaluation | 3,254 | 3,198 | ||||||
| Growth capital expenditures | 4,135 | (678) | ||||||
| All In Costs | $35,300 | $23,055 |
Three Months Ended December 31, Three Months Ended December 31, 2021 2020 El El Guanaceví Bolañitos Total Guanaceví Bolañitos Total Compas Compas
| Throughput tonnes | 108,334 | 105,158 | - | 213,492 | 106,425 | 107,332 23,632 237,389 |
| Payable silver ounces | 1,298,036 134,178 | 364 | 1,432,578 988,722 | 94,526 25,600 1,108,848 | ||
| Silver equivalent production (ounces) | 1,612,741 581,418 | 5,085 2,199,244 1,247,537 639,737 236,8952,124,169 | ||||
| Sustaining cost per ounce | $18.74 | $27.46 ($285.98) $19.48 | $19.67 | $16.98 ($20.19) $18.52 | ||
| All In costs per ounce | $24.64 | $20.79 | ||||
| Expressed in thousands US dollars | Year Ended December 31, 2021 | Year Ended December 31, 2020 |
El El Guanaceví Bolañitos Total Guanaceví Bolañitos Compas Compas Total
| Cash costs net of by-product | $52,380 | ($9,147) $1,709 $44,942 | $31,979 | ($10,701) ($1,954) $19,324 | ||||
| Operations stock based compensation | 180 | 180 | 61 | 421 | 114 | 108 | 108 | 330 |
| Corporate general and administrative | 4,564 | 2,082 | 329 | 6,975 | 5,961 | 2,891 | 1,172 | 10,024 |
| Corporate stock based compensation | 1,912 | 873 | 138 | 2,923 | 1,480 | 718 | 291 | 2,489 |
| Reclamation - amortization/accretion | 100 | 83 | 9 | 192 | 39 | 30 | 9 | 78 |
| Mine site expensed exploration | 1,611 | 1,216 | 198 | 3,025 | 839 | 707 | 1,115 | 2,661 |
| Intangible payments | 250 | 114 | 18 | 382 | 117 | 117 | 117 | 351 |
| Equipment loan payments | 1,099 | 2,082 | - | 3,181 | 839 | 2,039 | - | 2,878 |
| Capital expenditures sustaining | 21,964 | 14,150 | - | 36,114 | 11,103 | 11,933 | 95 | 23,131 |
| All In Sustaining Costs | $84,060 | $11,633 $2,462 $98,155 | $52,471 | $7,842 | $953 $61,266 | |||
| Growth exploration and evaluation | 14,277 | 6,600 | ||||||
| Growth capital expenditures | 7,872 | 2,408 | ||||||
| All In Costs | $120,304 | $70,274 |
Year Ended December 31, 2021 Year Ended December 31, 2020 El El Guanaceví Bolañitos Total Guanaceví Bolañitos Total Compas Compas
Throughput tonnes 414,355 418,514 54,555 887,424 346,679 331,174 79,307 757,160 Payable silver ounces 4,320,567 462,700 43,414 4,826,681 3,061,982 333,293 86,819 3,482,094 Silver equivalent production (ounces) 5,398,927 2,463,572 389,248 8,251,747 3,856,195 1,870,358 758,334 6,484,887 Sustaining cost per ounce $19.46 $25.14 $56.71 $20.34 $17.14 $23.53 $10.98 $17.59 All In costs per ounce $24.92 $20.18
Reconciliation of Sustaining Capital and Growth Capital
Expressed in thousands US dollars Three Months Ended Years Ended December 31 December 31
| 2021 | 2020 | 2021 | 2020 | |
| Capital expenditures sustaining | $11,086 | $7,269 | $36,114 | $23,131 |
| Growth capital expenditures | 4,135 | (678) | 7,872 | 2,408 |
| Acquisition capital expenditures | 10,106 | - | 10,106 | - |
Property, plant and equipment expenditures per Consolidated $25,327 $6,591 $54,092 $25,539 Statement of Cash Flows
Reconciliation of Silver Co-Product Cash Costs and Gold Co-Product Cash Costs
Three Months Ended December 31, Three Months Ended December 31, Expressed in thousands US dollars 2021 2020 El El Guanaceví Bolañitos Total Guanaceví Bolañitos Total Compas Compas
Direct production costs per financial $18,689 $7,329 ($5) $26,013 $15,635 $7,420 $3,060 $26,115 statements Smelting and refining costs included in net
- 362 (4) 358 - 380 111 491
revenue
| Royalties | 4,199 | 79 | 4 | 4,282 | 4,210 | 69 | 155 | 4,434 |
| Special mining duty(1) | 932 | (152) | - | 780 | 1,050 | 354 | - | 1,404 |
| Opening finished goods | (12,910) | (2,306) | - | (15,216) | (3,318) | (335) | (585) | (4,238) |
| Finished goods NRV adjustment | - | - | - | - | - | - | 174 | 174 |
| Closing finished goods | 10,093 | 2,857 | - | 12,950 | 1,509 | 250 | 642 | 2,401 |
| Direct costs | 21,003 | 8,169 | (5) | 29,167 | 19,086 | 8,138 | 3,557 | 30,781 |
Three Months Ended December 31, Three Months Ended December 31, 2020 2021 El El Guanaceví Bolañitos Total Guanaceví Bolañitos Total Compas Compas
Silver production (ounces) 1,301,941 141,258 365 1,443,564 991,697 99,417 26,175 1,117,289 Average realized silver price ($) 23.41 23.41 23.41 23.41 24.76 24.76 24.76 24.76 Silver value ($) 30,478,439 3,306,850 8,545 33,793,833 24,554,418 2,461,565 648,093 27,664,076
Gold production (ounces) 3,885 5,502 59 9,446 3,198 6,754 2,634 12,586 Average realized gold price ($) 1,811 1,811 1,811 1,811 1,885 1,885 1,885 1,885 Gold value ($) 7,035,735 9,964,122 106,849 17,106,706 6,028,230 12,731,2904,965,09023,724,610
Total metal value ($) 37,514,174 13,270,972 115,394 50,900,539 30,582,648 15,192,8555,613,18351,388,686
| Pro-rated silver costs (%) | 81% | 25% | 7% | 66% | 80% | 16% | 12% | 54% |
| Pro-rated gold costs (%) | 19% | 75% | 93% | 34% | 20% | 84% | 88% | 46% |
| Pro-rated silver costs ($) | 17,064 | 2,036 | (0) | 19,365 | 15,324 | 1,319 | 411 | 16,570 |
| Pro-rated gold costs ($) | 3,939 | 6,133 | (5) | 9,802 | 3,762 | 6,819 | 3,146 | 14,211 |
| Silver co-product cash costs | $13.11 | $14.41 | ($1.01) | $13.41 | $15.45 | $13.26 | $15.69 | $14.83 |
| Gold co-product cash costs | $1,014 | $1,115 | ($78) | $1,038 | $1,176 | $1,010 | $1,194 | $1,129 |
| Expressed in thousands US dollars | Year Ended December 31, 2021 | Year Ended December 31, 2020 |
El El Guanaceví Bolañitos Total Guanaceví Bolañitos Total Compas Compas
Direct production costs per financial $51,761 $28,896 $8,946 $89,603 $40,693 $21,796 $11,612 $74,101 statements Smelting and refining costs included in net
- $1,715 $244 $1,959 - 1,393 433 1,826
revenue Royalties 13,165 265 350 13,780 7,407 197 550 8,154 Special mining duty (1)
2,674 53 - 2,727 1,635 354 - 1,989
| Opening finished goods | (1,509) | (250) | (642) | (2,401) | (1,509) | (219) | (169) | (1,897) |
| Finished goods NRV adjustment | - | - | 266 | 266 | - | - | 174 | 174 |
| Closing finished goods | 10,093 | 2,857 | - | 12,950 | 1,509 | 250 | 642 | 2,401 |
| Direct costs | 76,184 | 33,536 | 9,164 118,884 | 49,735 | 23,771 | 13,242 86,748 |
Year Ended December 31, 2021 Year Ended December 31, 2020 Guanaceví Bolañitos Total Guanaceví Bolañitos Total Compas Compas
Silver production (ounces) 4,333,567 491,412 45,808 4,870,787 3,071,075 353,318 89,374 3,513,767 Average realized silver price ($) 25.22 25.22 25.22 25.22 21.60 21.60 21.60 21.60 Silver value ($) 109,292,56012,393,4111,155,278122,841,248 66,335,220 7,631,669 1,930,478 75,897,367
Gold production (ounces) 13,317 24,652 4,293 42,262 9,814 18,963 8,362 37,139 Average realized gold price ($) 1,790 1,790 1,790 1,790 1,846 1,846 1,846 1,846 Gold value ($) 23,837,430 44,127,0807,684,470 75,648,980 18,116,644 35,005,69815,436,252 68,558,594
Total metal value ($) 133,129,99056,520,4918,839,748198,490,228 84,451,864 42,637,36717,366,730144,455,961
| Pro-rated silver costs (%) | 82% | 22% | 13% | 62% | 79% | 18% | 11% | 53% |
| Pro-rated gold costs (%) | 18% | 78% | 87% | 38% | 21% | 82% | 89% | 47% |
| Pro-rated silver costs ($) | 62,543 | 7,354 | 1,198 | 73,575 | 39,066 | 4,255 | 1,472 | 45,578 |
| Pro-rated gold costs ($) | 13,641 | 26,182 | 7,966 | 45,309 | 10,669 | 19,516 | 11,770 | 41,170 |
| Silver co-product cash costs | $14.43 | $14.96 | $26.15 | $15.11 | $12.72 | $12.04 | $16.47 | $12.97 |
| Gold co-product cash costs | $1,024 | $1,062 | $1,856 | $1,072 | $1,087 | $1,029 | $1,408 | $1,109 |
Reconciliation of Realized Silver Price Per Ounce and Realized Gold Price Per Ounce
Expressed in thousands US dollars Three Months Ended Years Ended December 31 December 31
| 2021 | 2020 | 2021 | 2020 | |
| Gross silver sales | $33,090 | $35,129 | $97,257 | $74,733 |
| Silver ounces sold | 1,413,699 | 1,419,037 | 3,856,883 | 3,460,638 |
| Realized silver price per ounces | $23.41 | $24.76 | $25.22 | $21.60 |
Expressed in thousands US dollars Three Months Ended Years Ended December 31 December 31
| 2021 | 2020 | 2021 | 2020 | |
| Gross gold sales | $15,785 | $26,109 | $70,022 | $65,554 |
| Gold ounces sold | 8,715 | 13,850 | 39,113 | 35,519 |
| Realized gold price per ounces | $1,811 | $1,885 | $1,790 | $1,846 |
Cautionary Note Regarding Forward-Looking Statements
This news release contains “forward-looking statements” within the meaning of the United States private securities litigation reform act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation. Such forward-looking statements and information herein include but are not limited to statements regarding Endeavour’s anticipated performance in 2022 including changes in mining operations and forecasts of production levels, anticipated production costs and all-in sustaining costs, the timing and results of various activities and the impact of the COVID 19 pandemic on operations. The Company does not intend to and does not assume any obligation to update such forward-looking statements or information, other than as required by applicable law.
Forward-looking statements or information involve known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, production levels, performance or achievements of Endeavour and its operations to be materially different from those expressed or implied by such statements. Such factors include but are not limited to the ultimate impact of the COVID 19 pandemic on operations and results, changes in production and costs guidance, national and local governments, legislation, taxation, controls, regulations and political or economic developments in Canada and Mexico; financial risks due to precious metals prices, operating or technical difficulties in mineral exploration, development and mining activities; risks and hazards of mineral exploration, development and mining; the speculative nature of mineral exploration and development, risks in obtaining necessary licenses and permits, and challenges to the Company’s title to properties; as well as those factors described in the section “risk factors” contained in the Company’s most recent form 40F/Annual Information Form filed with the S.E.C. and Canadian securities regulatory authorities.
Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to: the continued operation of the Company’s mining operations, no material adverse change in the market price of commodities, mining operations will operate and the mining products will be completed in accordance with management’s expectations and achieve their stated production outcomes, and such other assumptions and factors as set out herein. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward- looking statements or information, there may be other factors that cause results to be materially different from those anticipated, described, estimated, assessed or intended. There can be no assurance that any forward-looking statements or information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or information.
Appendix
ENDEAVOUR SILVER CORP.
CONSOLIDATED STATEMENTS OFCOMPREHENSIVE EARNINGS (LOSS)
(expressed in thousands of US dollars, except for shares and per share amounts)
Years ended
December 31, December 31, 2021 2020
Revenue $ 165,320 $ 138,461
Cost of sales:
| Direct production costs | 89,603 | 74,101 |
| Royalties | 13,783 | 8,154 |
| Share-based payments | 421 | 330 |
| Depreciation, depletion and amortization | 23,977 | 28,136 |
| Write down of inventory to net realizable value | 1,168 | 405 |
128,952 111,126
Mine operating earnings 36,368 27,335
Expenses:
| Exploration and evaluation | 17,925 | 9,756 | |
| General and administrative | 10,063 | 12,715 | |
| Care and maintenance costs | 1,356 | 5,233 | |
| Impairment (reversal of impairment) of non-current assets, net | (16,791) | 424 | |
| Severance costs | 870 | - | |
| Write off of exploration properties | 715 | - |
14,138 28,128
Operating earnings (loss) 22,230 (793)
Finance costs 985 1,357
Other income (expense):
| Foreign exchange | (1,131) | (1,553) |
| Gain on asset disposal | 5,841 | - |
| Investment and other | 3,733 | 2,649 |
8,443 1,096
Earnings (loss) before income taxes 29,688 (1,054)
Income tax expense (recovery):
Current income tax expense 3,481 2,993 Deferred income tax expense (recovery) 12,252 (5,206) 15,733 (2,213)
| Net earnings and comprehensive earnings for the year | $ | 13,955 $ | 1,159 | ||
| Basic earnings per share based on net earnings | $ | 0.08 $ | 0.01 | ||
| Diluted earnings per share based on net earnings | $ | 0.08 $ | 0.01 | ||
| Basic weighted average number of shares outstanding | 167,289,732 | 150,901,598 | |||
| Diluted weighted average number of shares outstanding | 170,663,883 | 154,039,714 |
ENDEAVOUR SILVER CORP.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (expressed in thousands of US dollars)
December 31, December 31, 2021 2020
ASSETS
Current assets
| Cash and cash equivalents | $ 103,303 $ | 61,083 |
| Other investments | 11,200 | 4,767 |
| Accounts and other receivable | 14,462 | 20,144 |
| Income tax receivable | 177 | 52 |
| Inventories | 27,485 | 16,640 |
| Prepaid expenses | 5,135 | 2,284 |
| Total current assets | 161,762 | 104,970 |
| Non-current deposits | 599 | 591 |
| Deferred financing costs | - | 294 |
| Income tax receivable | 3,570 | - |
| Non-current IVA receivable | 4,256 | 2,676 |
| Deferred income tax asset | 936 | 12,753 |
| Intangible assets | 40 | 492 |
| Right-of-use leased assets | 664 | 861 |
| Mineral properties, plant and equipment | 122,197 | 87,955 |
| Total assets | $ 294,024 $ | 210,592 |
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
| Accounts payable and accrued liabilities | $ 31,991 $ | 27,764 |
| Income taxes payable | 4,228 | 3,038 |
| Loans payable | 4,128 | 3,578 |
| Lease liabilities | 207 | 173 |
| Total current liabilities | 40,554 | 34,553 |
| Loans payable | 6,366 | 6,094 |
| Lease liabilities | 794 | 921 |
| Provision for reclamation and rehabilitation | 7,397 | 8,876 |
| Deferred income tax liability | 1,506 | 1,077 |
| Total liabilities | 56,617 | 51,521 |
Shareholders’ equity Common shares, unlimited shares authorized, no par value, issued
| and outstanding 170,537,307 shares (Dec 31, 2020 - 157,924,708 shares) | 585,406 | 517,711 |
| Contributed surplus | 6,331 | 9,662 |
| Retained earnings (deficit) | (354,330) | (368,302) |
| Total shareholders’ equity | 237,407 | 159,071 |
| Total liabilities and shareholders’ equity | $ 294,024 $ | 210,592 |
ENDEAVOUR SILVER CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS (expressed in thousands of US dollars)
Years ended
December 31, December 31, Notes 2021 2020
Operating activities
Net earnings for the year $ 13,955 $ 1,159
Items not affecting cash:
| Share-based compensation | 3,636 | 3,003 |
| Depreciation, depletion and amortization | 24,527 | 28,863 |
| Impairment (reversal of impairment) of non-current assets, net | (16,791) | 424 |
| Deferred income tax expense (recovery) | 12,252 | (5,206) |
| Unrealized foreign exchange loss (gain) | (176)- | (1,032) |
| Finance costs | 985 | 1,357 |
| Write off of mineral properties | 715 | - |
| Write down of warehouse inventory | 894 | - |
| Write down of inventory to net realizable value | 272 | 405 |
| Loss (gain) on asset disposal | (5,914) | 86 |
| Loss (gain) on other investments | (2,117) | (233) |
| Net changes in non-cash working capital | (8,776) | 10,138 |
| Cash from operating activities | 23,462 | 38,964 |
Investing activities
| Proceeds on disposal of property, plant and equipment | 10,113 | 190 |
| Mineral property, plant and equipment | (54,092) | (25,539) |
| Purchase of short term investments | (3,307) | (5,497) |
| Proceeds from disposal of marketable securities | 9,288 | 1,032 |
| Redemption of (investment in) non-current deposits | (8) | - |
| Cash used in investing activities | (38,006) | (29,814) |
Financing activities
| Repayment of loans payable | (3,563) | (3,229) |
| Repayment of lease liabilities | (179) | (183) |
| Interest paid | (668) | (918) |
| Public equity offerings | 59,998 | 26,367 |
| Exercise of options | 4,719 | 6,910 |
| Share issuance costs | (1,293) | (1,112) |